The Bay Area's non-tech companies lagged behind their tech counterparts in revenue and profits during 2013, fresh evidence that the technology surge is driving job creation and new wealth.

That was one of the trends identified by this newspaper's annual survey of the SV150 -- the 150 largest publicly held companies in Silicon Valley -- and the Bay Area Non-Tech 25 -- the 25 largest companies in the Bay Area that are not in the technology sector.

"The faster growth among tech companies reflects the significant levels of adoption of technologies created by companies in Silicon Valley," said Michael Yoshikami, president of Walnut Creek-based Destination Wealth Management. "The slower growth for non-tech companies reflects the reality that in many parts of the world, the economy is still sluggish."

Fierce competition from retailers such as Target and Walmart squeezed profits for Pleasanton-based Safeway in 2013.
(Justin Sullivan/Getty Images)

Compared to the year before, sales by the 25 largest publicly held non-tech companies in the Bay Area last year fell an average of 0.1 percent, while sales rose an average of 4.5 percent at tech companies in the SV150, this newspaper's survey determined. Profits rose 7.7 percent for the Bay Area non-tech 25, while soaring 17.4 percent for the SV150.

Companies in the Bay Area Non-Tech 25 reduced their aggregate staffing levels by 2.9 percent, while the SV150 increased its aggregate workforce by 2.9 percent, according to this newspaper's research.

"Companies are being more conservative in terms of hiring," Yoshikami said. "If they don't add full-time workers, they have more flexibility by hiring more part-time workers."

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Across the United States, the pace of job growth remains slower than normal for this stage of a rebound, analysts said.

"Tech has been doing really well since 2010, when the recession officially ended," said Jordan Levine, director of economic research for Beacon Economics. "Tech has been a real driver of the recovery from the very start."

Structural issues as well as current economic conditions tend to work against non-tech companies, according to analysts.

"A lot of non-tech companies are in older, more mature industries where competition is more fierce and profits are competed away," said Scott Anderson, chief economist with San Francisco-based Bank of the West.

Among the local examples of this are Pleasanton-based Safeway and Dublin-based Ross Stores.

"Retail and consumer companies are being impacted by sluggish real income growth," Anderson said. "Many consumers still have tight budgets, so they have to be careful how they spend their money."

Competition is particularly fierce among supermarket operators, a reality that squeezes profits for those companies.

"Many grocers have to compete against new entrants into the space like Walmart and Target that are offering groceries in their stores," Anderson said. "And they also have to deal with an online retailer like Amazon that offers same-day delivery of groceries through its Amazon Fresh venture.

San Ramon-based Chevron had in recent years pumped out a geyser of steadily improving quarterly profits. But the energy giant, while still highly profitable, last year bumped up against some stubborn obstacles that have caused its flow of profits to ebb. Chevron production levels have peaked and are starting to wane, a trend that could persist into 2015 until some mega projects such as its liquefied natural gas fields in Australia come on line.

"Oil prices are down from their peaks," Anderson noted. "When it comes to drilling overseas, oil companies have to drill deeper and deeper in the ocean, which becomes more expensive and difficult. Or some of the countries where they drill are seeing wars or other conflicts."